The final Cost Inflation Index (CII) for the financial year 2025 has been notified by the Ministry of Finance. The cost inflation index for the year 2024-25 i.e. assessment year 2025-26 is 363.
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The final Cost Inflation Index (CII) for the financial year 2025 has been notified by the Ministry of Finance. The cost inflation index for the year 2024-25 i.e. assessment year 2025-26 is 363. The ministry has issued a notification through CBDT on 24 May 2024 under notification number 44/2024.
This notification has been made using the powers given by clause (V) of the explanation of section 48 of the Income Tax Act 1961. Also, it has been introduced with some amendments in the previous notification issued on June 5, 2017. This notification will be effective from April 1, 2025 and will be applicable to the assessment year 2025-26. Let us tell you that the cost inflation index for the financial year 2023-24 was 348.
CBDT notifies the Cost Inflation Index (CII) for FY 2024-2025 vide Notification No. 44/2024 dated 24th May, 2024.
The Cost Inflation Index for FY 2024-25 relevant to AY 2025-26 & subsequent years is 363. pic.twitter.com/Fo9y47C15H— Income Tax India (@IncomeTaxIndia) May 25, 2024
What is the use of CII?
Cost inflation index is very useful in calculating long-term capital gain from selling any immovable property. It is also useful in calculating long-term capital gain from selling securities and jewellery etc. It is required while filing ITR.
It adjusts the purchase price of assets to take into account inflation, thereby ensuring that taxpayers are taxed on their real profits rather than the nominal gains inflated by general price appreciation.
This mechanism comes under the Income Tax Act, 1961. It helps maintain equity in the tax system by recognising the decreasing effect of inflation on the value of money over time. With the help of indexation, one is able to reduce his long-term capital gains, thereby reducing the taxable income.
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